None Raider Co. recently acquired all of Lost Arc, Inc.'s net assets in abusiness acquisition. The cash purchase price was $7.8 million. LostArc, Inc.'s assets and liabilities had the following appraised valuesimmediately prior to the acquisition:land, $2.1 million;buildings, $3.8 million;inventory, $2.6 million;long-term notes payable, for which Raider Co. assumes paymentresponsibilities, $1.9 million.How much goodwill will result from this transaction?(Enter your answers in whole dollars.)

Step 1: Define GoodwillGoodwill is an intangible asset which is the most intangible among assets.…

Answered: Raider Co. recently acquired all of…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 37RQSC

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Arizona Corporation acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $260,000, liabilities of $40,000, and stockholders' equity of $220,000. An appraiser assessed the fair market value of the tangible assets at $250,000 at the date of acquisition. Arizona Corporation's financial condition just prior to the acquisition is shown in the following statements model. Required a. Compute the amount of goodwill acquired. b. Record the acquisition in a financial statements model like the preceding one. Complete this question by entering your answers in the tabs below. Required A Required B Record the acquisition in a financial statements model. Note: In the Statement of Cash Flows column, use the initials OA for operating activities, FA for financing activities, or IA for investing activity. Enter any cash outflows or decreases to account balances with a minus sign. Leave cells blank if no input is…
On March 31, 2018, Elf Hotels purchased Reindeers and Riders Company for $6,000,000. Reindeers reported the following balance sheet on the date of the acquisition:
Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately prior to the acquisition, Saville Company’s balance sheet was as follows: Book Value Fair Value Cash $129,480 $129,480 Receivables (net) 177,290 209,150 Inventory 362,130 412,850 Plant and equipment (net) 485,520 490,050 Land 440,090 647,770 Total assets $1,594,510 $1,889,300 Current Liabilities $586,310 $568,060 Common stock ($5 par value) 486,050 Other contributed capital 122,210 Retained earnings 399,940 Total equities $1,594,510 (a) Prepare the journal entries on the books of Preston Company to record the purchase of the assets and assumption of the liabilities of Saville Company if the amount paid was $1,428,550 in cash. (If no entry is required, select "No Entry" for the account titles and enter 0 for the…
Tweeden Corporation is contemplating the acquisition of the net assets of Sylvester Corporation in anticipation of expandingits operations. The balance sheet of Sylvester Corporation on December 31, 2015, is as attached:n appraiser for Tweeden determined the fair values of Sylvester’s assets and liabilities to be as shown as in attachment 2The agreed-upon purchase price is $580,000 in cash. Acquisition costs paid in cash total $20,000.Using the above information, do value analysis and prepare the entry on the books of Tweeden Corporation to acquire the net assets of Sylvester Corporation on December 31, 2015.
Arizona Corporation acquired the business Data Systems for $310,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $320,000, liabilities of $17,000, and stockholders' equity of $303,000. An appraiser assessed the fair market value of the tangible assets at $300,000 and liabilities at $17,000 at the date of acquisition. Arizona Corporation's financial condition just prior to the acquisition is shown in the following statements model. Balance Income Sheet Statement Assets Cash = + Liabilities + Tangible Assets ΝΑ + Stockholders Equity Goodwill Revenue Expenses = + ΝΑ = ΝΑ + Net Income 520,000 + Required 1.Compute the amount of goodwill acquired. 2.Record the acquisition in a financial statements model. Arizona Corporation's financial condition just prior to the acquisition is shown in the financial statements model. 3.Record the acquisition in general journal format. 520,000 NA Statement of Cash Flows ΝΑ = ΝΑ ΝΑ
Arizona Corp. acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $260,000, liabilities of $40,000, and stockholder's equity of $220,000. An appraiser assessed the fair market value of the tangible assets at $250,000 at the date of acquisition. Compute the amount of good will acquired Record the qcquisition in a financial statements model When will teh goodwill be written off under the impairment rules Record the acquisition in general journal format
arizona corp. acquired the business data systems for $320,000 cash and assumed all liabilites at the data of purchase. data's books showed tangible assets of $340,000, liabilities of $19,000, and stockholders' equity of $321,000. an appraiser assessed the fair market value of the tangible assets at $310,000 at the data of acquisition. a. compute the amount of goodwill acquired. b. record the acquisition in a financial statements model. Arizona corps. financial condition just prior to the aquistion is shown in the following statements model. cash paid- liabilites assumed- total- FMV of assets- goodwill-
Pritano Company acquired all the net assets of Succo Company on December 31, 2013, for $2,185,400 cash. The balance sheet of Succo Company immediately prior to the acquisition showed: Book value Fair value Current assets $ 871,440 $871,440 Plant and equipment 1,025,090 1,437,590 Total $1,896,530 $2,309,030 Liabilities $194,060 $207,670 Common stock 484,800 Other contributed capital 632,900 Retained earnings 584,770 Total $1,896,530 As part of the negotiations, Pritano agreed to pay the stockholders of Succo $356,690 cash if the post-combination earnings of Pritano averaged $2,185,400 or more per year over the next two years. The estimated fair value of the contingent consideration was $143,480 on the date of the acquisition. (a) Prepare the journal entry on the books of Pritano to record the acquisition on December 31, 2013. (If no entry is required, select…
Plaintain Company owns 100% of Syncopati Inc. The excess of acquisition cost over book value was attributed entirely to previously unrecorded identifiable intangibles. For 2021, Syncopati reported net income of $6,000,000 and declared and paid dividends of $1,500,000. Amortization of the previously unrecorded identifiable intangibles for 2021 is $1,200,000. The following information is available regarding intercompany transactions: 1. During 2021, Syncopati sold services to Plaintain for $1,000,000. Plaintain still owes Syncopati $100,000 for those services at year-end. 2. Plaintain's ending inventory at December 31, 2021, included merchandise acquired from Syncopati; the unconfirmed profit on this inventory was $300,000. 3. Plaintain's ending inventory at December 31, 2020, included merchandise acquired from Syncopati; the unconfirmed profit on this inventory was $400,000. 4. Syncopati's ending inventory at December 31, 2021, included merchandise acquired from Plaintain; the…
On 1/1/2020, X Company acquired 100% of Y Company's Net assets for $150,000 cash. The Book value of Y's Net assets was equal to the fair value of Y Company's net assets at the date of acquisition except for Land (included in fixed assets) its market value was less than the book value by $1,000, the balance sheet data at 1/1/2020, are as follows: item X co Y co cash 404,000 150,000 Fixed assets 100,000 66,000 Liabilities 144,000 72,000 Common stock 120,000 60,000 Retained earning 240,000 84,000 required: if the acquisition are merger record the journal entries and prepare x balance sheet after the merger
On April 1, 2010, Aileen Co paid P620,000 for all the assets and liabilities of Joy Co. in a transaction properly accounted as a acquisition. The recorded assets and liabilities of Joy Co. on April 1, 2010 are: Cash P60,000 180,000 320,000 100,000 (120,000) P540,000 Inventory Property and equipment (net of accumulated depreciation of P220,000) Goodwill Liabilities Net assets On April 1, 2010, Joy's inventory had a fair value of P150,000 and the property and equipment (net) had a fair value of P380,000. Also, Joy has an unrecorded contingent liability amounting which has a Pi0,000 provisional fair value on April 1, 2010. An additional valuation received on June 30, 2010 increased this provisional fair value of P25,000 and on May 10, 2011, this fair value was finalized at P22,000. Required: Prepare journal entries in the books of Aileen Co. and Joy Co for the year 2010 and 2011.
On September 1, 2018, Vernon Corporation acquired Barlow Enterprises for a cash payment of $820.000. At the time of purchases. Barlow's balance sheet showed assets of $610.000. liabilities of $240.000, and owner's equity of $420.000. The fair value of Barlow's assets is estimated to be 5970.000.The liabilities are all estimated to be at fair value. a) Compute the amount of goodwill acquired by Vernon. 120000 b) On December 31, 2020, the fair value of Barlow as a reporting unit is estimated to be $720.000. The carrying value of Vernon's investment in Barlow at year-end is $750.000. The fair value of Barlow's identifiable net asset, excluding the goodwill, is determined to be 655.000 Prepare Vernon's journal entry, if necessary, to record impairment of goodwill. Please use the new standard (Hint: The FASB's new goodwill Impairment testing guidance- ASU 2017-04 is required for public SEC filers for periods beginning after December 15. 2019) Note: Please use integer only. Do not use a S.…

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